Consumer contracts for services in India are governed by various laws and regulations to ensure fair and transparent dealings between service providers and consumers. These contracts cover a wide range of services, including telecommunications, banking, insurance, and utilities, among others. This essay aims to discuss the key provisions governing consumer contracts for certain services in India, along with relevant case laws.
1. The Consumer Protection Act, 2019
The Consumer Protection Act, 2019 (CPA) is the primary legislation governing consumer rights and contracts in India. It provides for the establishment of consumer courts at the district, state, and national levels to adjudicate disputes arising out of consumer contracts.
Section 2(7) – Consumer
According to Section 2(7) of the CPA, a consumer is defined as any person who buys any goods or hires or avails any services for a consideration. This definition is broad and encompasses a wide range of individuals who enter into contracts for services.
Section 2(17) – Service
Section 2(17) of the CPA defines service as any description which is made available to potential users and includes, but is not limited to, the provision of facilities in connection with banking, insurance, transport, processing, supply of electrical or other energy, telecommunications, housing construction, entertainment, and such other services.
Services:
Consumer contracts for services in India cover a broad spectrum of services that are provided to consumers for a consideration. The Consumer Protection Act, 2019 (CPA) and other related regulations define and regulate these services. Below are the categories of services that typically come under consumer contracts in India:
1. Telecommunications Services
Telecommunications services provided by telecom operators, including mobile, landline, and internet services, fall under consumer contracts. Issues related to service quality, billing, and network coverage often arise in these contracts.
2. Banking and Financial Services
Consumer contracts in the banking and financial sector cover services like savings and current accounts, loans, credit cards, and investment products. Consumers have rights related to transparency in fees and charges, account management, and dispute resolution.
3. Insurance Services
Insurance services, including life insurance, health insurance, and general insurance (like vehicle and property insurance), are also covered under consumer contracts. Consumers have rights related to policy terms, claim settlement, and premium payments.
4. Utilities Services
Utilities services, such as electricity, water, and gas supply, are essential services covered under consumer contracts. Consumers have rights related to service continuity, billing accuracy, and complaint resolution.
5. Housing and Real Estate Services
Consumer contracts in the housing and real estate sector cover services like property buying, renting, and maintenance. Issues related to property quality, legal compliance, and dispute resolution are common in these contracts.
6. Transportation Services
Transportation services, including railways, airlines, and cab services, are also covered under consumer contracts. Consumers have rights related to service quality, ticket booking, and compensation for delays and cancellations.
7. Healthcare and Wellness Services
Consumer contracts in the healthcare sector cover services like hospitalization, diagnostic tests, and wellness programs. Consumers have rights related to quality of care, treatment options, and billing transparency.
8. Entertainment and Leisure Services
Entertainment and leisure services, including movie theaters, amusement parks, and fitness centers, are also covered under consumer contracts. Consumers have rights related to service quality, ticket pricing, and safety standards.
Key Provisions in Consumer Contracts
Right to Information (Section 6)
Consumers have the right to be informed about the quality, quantity, potency, purity, standard, and price of goods or services, as per Section 6 of the CPA.
Right to Choose (Section 7)
Consumers have the right to choose from a variety of goods or services offered at competitive prices, as per Section 7 of the CPA.
Right to Safety (Section 8)
Consumers have the right to be protected against the marketing of goods or services which are hazardous to life and property, as per Section 8 of the CPA.
Right to Redressal (Section 18)
Consumers have the right to seek redressal against unfair or restrictive trade practices or unscrupulous exploitation of consumers, as per Section 18 of the CPA.
Case Laws
Laxmi Engineering Works v. P.S.G. Industrial Institute (1995)
In this case, the Supreme Court held that a service provider is liable for any defect in the services provided, and consumers have the right to seek compensation for any loss or damage suffered due to such defects.
Maharashtra State Electricity Board v. Official Liquidator, High Court of Bombay (2005)
In this case, the Bombay High Court held that the Maharashtra State Electricity Board is a service provider under the CPA, and consumers have the right to seek redressal for any deficiency in services provided by the Board.
Conclusion
Consumer contracts for certain services in India are governed by the Consumer Protection Act, 2019, which provides for various rights and protections to consumers. These rights include the right to information, right to choose, right to safety, and right to redressal. Additionally, case laws like Laxmi Engineering Works v. P.S.G. Industrial Institute and Maharashtra State Electricity Board v. Official Liquidator have further clarified the liabilities of service providers and the rights of consumers under the CPA.
In conclusion, it is crucial for both service providers and consumers to be aware of their rights and obligations under the CPA to ensure fair and transparent dealings in consumer contracts for services in India.
Medical negligence and malpractice are serious concerns that affect patients’ lives and well-being. In India, like many other countries, the law recognizes the right of patients to receive proper medical care and holds healthcare professionals accountable for any negligence or malpractice.
Definition
Medical negligence refers to the failure of a medical professional to provide the standard of care that is expected in a particular situation, resulting in harm or injury to the patient. In legal terms, medical negligence can be understood through various sections of the Indian Penal Code (IPC) and the Consumer Protection Act (CPA). Here are the relevant sections that define and address medical negligence in India:
1. Indian Penal Code (IPC), 1860
Section 304A: This section deals with causing death by negligence. It states that whoever causes the death of any person by a rash or negligent act not amounting to culpable homicide shall be punished with imprisonment or a fine, or both. In the context of medical negligence, this section can be invoked when a patient dies due to the negligent act of a medical professional.
2. Consumer Protection Act (CPA), 2019
Section 2(1)(g): This section defines ‘deficiency’ as any fault, imperfection, shortcoming, or inadequacy in the quality, nature, or manner of performance that is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service. Medical services are considered as ‘services’ under this Act, and any deficiency in providing these services can be considered as medical negligence.
Section 2(1)(o): This section defines ‘service’ as service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement, or the purveying of news or other information. Medical services provided by doctors and hospitals fall under this definition, and any negligence in providing these services can be addressed under the CPA.
Section 2(1)(o)(ii): This subsection specifically includes medical services provided by a medical practitioner or a paramedical professional within the definition of ‘service’ under the CPA. Therefore, any negligence or deficiency in these services can be addressed through consumer forums established under the CPA.
Legal Framework
The primary legislation governing medical negligence and malpractice in India is the Indian Penal Code (IPC), 1860, and the Consumer Protection Act (CPA), 2019. Additionally, the Indian Medical Council (Professional Conduct, Etiquette, and Ethics) Regulations, 2002, set forth the ethical standards and guidelines for medical practitioners.
1. Indian Penal Code (IPC), 1860
Section 304A of the IPC deals with causing death by negligence. It states that whoever causes the death of any person by a rash or negligent act not amounting to culpable homicide shall be punished with imprisonment or a fine, or both. This section is often invoked in cases where a patient dies due to the negligence of a medical professional.
2. Consumer Protection Act (CPA), 2019
The CPA, 2019, provides a legal framework for patients to seek redressal for medical negligence and malpractice through consumer forums. Under this Act, a patient can file a complaint against a healthcare provider for deficiency in services, including negligence or malpractice.
3. Indian Medical Council (Professional Conduct, Etiquette, and Ethics) Regulations, 2002
These regulations set the ethical standards and guidelines that medical practitioners in India are expected to adhere to. Any violation of these regulations can result in disciplinary action against the medical professional.
Various circumstances of medical negligence:
In India, medical negligence can be determined under various circumstances where there is a breach of the standard of care expected from a medical professional, resulting in harm or injury to the patient. While there is no exhaustive list of circumstances that constitute medical negligence, some common scenarios where medical negligence may be established include:
1. Failure to Obtain Informed Consent:
A medical professional is required to obtain informed consent from the patient before performing any medical procedure or treatment. Failure to provide adequate information about the risks, benefits, and alternatives of the procedure can amount to negligence.
2. Misdiagnosis or Delayed Diagnosis:
If a doctor fails to diagnose a medical condition accurately or timely, leading to delayed treatment or incorrect treatment, it can be considered as medical negligence.
3. Surgical Errors:
Mistakes made during surgery, such as operating on the wrong body part, leaving surgical instruments inside the patient, or performing unnecessary surgery, can be deemed as medical negligence.
4. Prescription Errors:
Administering the wrong medication, incorrect dosage, or failing to consider a patient’s allergies or other medications can result in harm to the patient and may be considered as negligence.
5. Negligence During Childbirth:
Injuries to the mother or child during childbirth due to the negligence of healthcare providers, such as improper use of delivery instruments or failure to monitor fetal distress, can be categorized as medical negligence.
6. Lack of Proper Monitoring or Follow-up:
Failing to monitor a patient’s condition adequately after a procedure or treatment, or neglecting to provide appropriate follow-up care, can lead to complications and may be considered as negligence.
7. Vicarious Liability:
Hospitals or healthcare institutions can be held vicariously liable for the negligence of their employees, including doctors, nurses, and other staff members, if it is established that the negligence occurred while the employee was acting within the scope of their employment.
Legal Proceedings and Proof of Medical Negligence:
To establish medical negligence in India, the following elements generally need to be proven:
Duty of Care: The medical professional owed a duty of care to the patient.
Breach of Duty: There was a breach of this duty of care, meaning the medical professional failed to provide the standard of care expected in the circumstances.
Causation: The breach of duty directly resulted in harm or injury to the patient.
Damages: The patient suffered damages as a result of the negligence, which can be physical, emotional, or financial.
Patients who believe they have been victims of medical negligence can seek legal recourse under the Indian Penal Code (IPC), 1860, and the Consumer Protection Act (CPA), 2019. They can file a complaint with the appropriate consumer forum or civil court and may be entitled to compensation for the damages suffered due to the negligence of the medical professional.
Punishments for medical negligence:
In India, medical negligence is a serious issue that can lead to legal consequences for doctors and other healthcare professionals. The punishments available for doctors found guilty of medical negligence vary depending on the severity of the negligence and the harm caused to the patient. Some of the potential legal consequences and punishments for medical negligence in India include:
1. Criminal Liability under Indian Penal Code (IPC), 1860:
Section 304A: Causing death by negligence – If a patient dies due to the negligent act of a doctor, the doctor can be charged under this section, which provides for imprisonment for a term which may extend to two years, or with a fine, or both.
2. Civil Liability under Consumer Protection Act (CPA), 2019:
Compensation: Patients or their legal representatives can file a complaint against the doctor or hospital for deficiency in services due to medical negligence. The consumer forums can award compensation to the aggrieved party for the harm, injury, or loss suffered due to the negligence.
3. Professional Disciplinary Action:
Medical Council of India (MCI) or State Medical Councils: Doctors found guilty of medical negligence may face disciplinary action by the Medical Council of India (MCI) or the respective State Medical Councils. Depending on the severity of the negligence, the doctor may face penalties ranging from suspension or cancellation of their medical license to fines or warnings.
4. Civil Lawsuits:
Patients can also file civil lawsuits against doctors or healthcare institutions for medical negligence. If the patient is able to prove the negligence in the court of law, they may be awarded compensation for the damages suffered, including medical expenses, loss of income, and pain and suffering.
5. Professional Reputation and Ethical Consequences:
Apart from legal and financial consequences, doctors found guilty of medical negligence may suffer damage to their professional reputation and face ethical consequences within the medical community. This can have long-term implications on their practice and career.
Proving Medical Negligence:
To establish medical negligence and impose punishments on doctors in India, the following elements generally need to be proven:
Duty of Care: The doctor owed a duty of care to the patient.
Breach of Duty: There was a breach of this duty of care, meaning the doctor failed to provide the standard of care expected in the circumstances.
Causation: The breach of duty directly resulted in harm or injury to the patient.
Damages: The patient suffered damages as a result of the negligence.
It is important to note that each case of medical negligence is unique, and the punishments imposed on doctors may vary based on the specific facts and circumstances of the case. Patients who believe they have been victims of medical negligence should consult with legal experts to understand their rights and options for seeking redressal.
Case Laws
Several landmark judgments by Indian courts have shaped the jurisprudence around medical negligence and malpractice. Some notable cases include:
1. Dr. Laxman Balkrishna Joshi vs. Dr. Trimbak Bapu Godbole (1969)
In this case, the Supreme Court of India defined medical negligence as a failure to exercise reasonable care and skill expected of a medical professional. The court held that a doctor is liable for negligence if he/she fails to provide the standard of care expected in a particular situation.
2. Spring Meadows Hospital vs. Harjol Ahluwalia (1998)
The National Consumer Disputes Redressal Commission (NCDRC) held in this case that a hospital is vicariously liable for the negligence of its employees, including doctors and nurses. The hospital was ordered to pay compensation to the patient for the negligence of its staff.
3. Indian Medical Association vs. V.P. Shantha (1995)
In this landmark judgment, the Supreme Court ruled that medical services provided by doctors are considered as ‘services’ under the CPA, 1986. This decision paved the way for patients to seek redressal for medical negligence through consumer forums.
Conclusion
Medical negligence and malpractice are grave issues that require stringent legal measures to protect patients’ rights and ensure accountability among healthcare providers. In India, the legal framework provided by the IPC, CPA, and ethical regulations sets the groundwork for addressing these concerns. Furthermore, landmark judgments by Indian courts have further clarified and strengthened the legal principles surrounding medical negligence and malpractice. It is essential for both medical professionals and patients to be aware of these laws and regulations to uphold the highest standards of medical care and ensure justice in cases of negligence or malpractice.
The Consumer Protection Act, 2019, represents a significant milestone in the realm of consumer rights in India. Enacted to strengthen consumer protection mechanisms and provide effective remedies for grievances, the Act introduces several provisions aimed at safeguarding the interests of consumers. This essay will explore the key provisions of the Consumer Protection Act, 2019, supported by relevant sections and case laws.
Establishment of Consumer Protection Councils (Section 3): The Act mandates the establishment of Central Consumer Protection Authority (CCPA) and State Consumer Protection Councils to promote, protect, and enforce the rights of consumers. These bodies play a vital role in formulating policies and initiatives for consumer welfare. Section 3 of the Act outlines the functions of these councils, including advising the government on consumer-related issues.
Consumer Rights (Section 2(7)): The Act defines consumer rights, including the right to be protected against marketing of goods and services that are hazardous to life and property, right to be informed about the quality, quantity, potency, purity, standard, and price of goods, and right to seek redressal against unfair trade practices. Section 2(7) enshrines these rights, emphasizing the need to protect consumers from exploitation.
Central Consumer Protection Authority (Section 10): The Act establishes the CCPA as a regulatory authority empowered to investigate, inquire into, and take appropriate action against unfair trade practices, misleading advertisements, and violations of consumer rights. Section 10 of the Act delineates the powers and functions of the CCPA, including the authority to impose penalties on erring entities.
Consumer Dispute Redressal Commissions (Section 34): The Act provides for the establishment of Consumer Dispute Redressal Commissions at the district, state, and national levels to adjudicate consumer disputes expeditiously. Section 34 outlines the jurisdiction, powers, and procedures of these commissions, ensuring accessible and efficient redressal mechanisms for consumers.
Product Liability (Section 2(34)): Under the Act, product liability is defined as the liability of a manufacturer, seller, or service provider for any harm caused to a consumer due to defective goods or deficient services. Section 2(34) imposes strict liability on parties involved in the supply chain, holding them accountable for ensuring the safety and quality of products.
Unfair Trade Practices (Section 2(47)): The Act prohibits unfair trade practices such as false representation, misleading advertisements, and deceptive practices that may deceive or mislead consumers. Section 2(47) provides a broad definition of unfair trade practices, empowering consumers to seek redressal against deceptive conduct by businesses.
Consumer Awareness and Education (Section 18): Recognizing the importance of consumer education, the Act mandates the promotion of consumer awareness through campaigns, workshops, and training programs. Section 18 emphasizes the role of the government, consumer organizations, and educational institutions in disseminating information about consumer rights and responsibilities.
Conclusion:
The Consumer Protection Act, 2019, embodies a comprehensive framework for protecting and promoting consumer rights in India. Through its provisions on consumer councils, rights, regulatory authorities, dispute redressal mechanisms, product liability, unfair trade practices, and consumer education, the Act aims to empower consumers and ensure fair and transparent transactions. By upholding the principles of accountability, transparency, and redressal, the Act contributes to building a robust consumer protection regime conducive to economic growth and consumer welfare.
Buys any product, Uses a product with the approval of its buyer, Hires any service. Such a person as above is called a consumer. It must be noted that the size of the product or the amount of money paid for the purchase is irrelevant. So, a consumer case can be filed in connection with purchase of a pen as well as for purchase of a penthouse and also includes offline or online transaction through electronic means or by Tele shopping/Direct-selling/multi-level
Who is NOT a Consumer?
The person who Obtain Goods or Services for Free. Obtain Goods or Services for the purpose of Resale (Means of Commercial purpose). But person of Goods bought and used by him exclusively for the purpose of earning his livelihood by means of self-employment is a CONSUMER Under the new Act, “consumer” is defined as a person who “buys any goods” and “hires or avails of any service” for consideration but does not include a person who obtains goods for resale or any commercial purpose.
Salient features of Consumer Protection Act
● Coverage of items : This act is applicable on all products and services .
● Coverage of sector : This act is applicable to all areas whether private ,public or cooperative
● Compensatory nature of provisions as it compensates the consumer for the losses .
● Group of consumer’s rights
● Effective safeguards
● It is applicable to all types of goods and services unless specifically exempted by the Central Government . .
● The ambit of the Act covers all the sectors like public , private or co operative societies etc. .
● It is compensatory in nature . .
● A three tier system of redressal forums have been created like District forum , State Commission and the National Commission
● E-Filing of Complaints.
Need for the Consumer Protection Act, 2019
The Indian government passed the Consumer Protection Act, 2019 to address issues connected to consumer rights violations, unfair business practices, deceptive advertising, and other situations that are detrimental to consumers’ rights. Due to the advancement of technology and the significant rise in the purchasing and selling of products and services online over the past several years, the Parliament intended the Act to include provisions for e-consumers..
By establishing Consumer Protection Councils to resolve disputes should they occur and to give adequate compensation to consumers in the event that their rights have been violated, the Act aims to better protect the rights and interests of consumers. Additionally, it offers quick and efficient handling of customer concerns through alternative dispute resolution procedures. The Act also encourages consumer education to inform consumers of their rights, obligations, and options for resolving complaints.
Objective of the Consumer Protection Act, 2019
The Act’s primary goals are to safeguard consumer interests and create a reliable, effective procedure for resolving consumer complaints. the following:
Defend against the promotion of goods that pose a risk to property and human life.
2. To protect consumers from unfair business practises, provide information about the potency, amount, standard, purity, and pricing of the items.
3. Create Consumer Protection Councils to safeguard customers’ rights and interests.
4. Whenever feasible, guarantee that customers may access a trusted source for affordable goods.
5. Investigate and seek remedies for any unethical business activities or consumer exploitation.
6. By selecting authorities for the prompt and adequate administration and resolution of consumer issues, you may protect consumers.
7. Specify the punishments for violations of the Act.
8. In the event that an issue or dispute emerges, listen to the consumer’s welfare concerns and make sure they are taken into consideration in the proper forums.
9. Provide consumers consumer education so they can understand their rights.
10. Provide quick and efficient handling of customer concerns through alternative dispute resolution procedures.
The essential commodities act 1955 is an act which was legislated back in 1955 when the country depended on foreign country imports for basic goods like wheat. There was a high possibility of hoarding of these commodities and so in order to stop accumulation and black marketing of these products the essential commodities act 1955 was brought up. It empowered the government to take decisions regarding the production, supply and distribution of the good and also regulate and decide the stock limit of the essential commodities.
Scope
The Act was enacted on February 12th, 1980, and there are provisions and punishments for persons who commit black marketing or hoarding.
The Act empowers the state government and central government or an official representative to detain individuals or groups committing black marketing or hoarding.
The Act empowers district magistrates as well as the commissioner of police to take legal action against offenders.
The Objectives of the Act
The objectives of the act are to provide for the control of (i) Production (ii) Supply (iii) Distribution of trade commerce in certain commodities, in the interest of general public
Definition Section 2
The section 2 of this Act defines important terminologies used under the Act. What constitute essential commodities: The phrase “essential Commodity” as per the Act means any of the following commodities (S-2(a) (i) Cattle fodder, including oilcakes and other concentrates (ii) Coal, including cake and other derivatives; (iii) Component parts and accessories of automobiles. (iv) Cotton and woolen textiles (v) Drugs food stuffs, including edible oilseeds and oils. (vi) Iron and steel, including manufactured products of iron and steel. (vii) Paper including newsprints, paper board and straw board. (viii) Petroleum and petroleum products (xi) Raw cotton, whether ginned or unginned, and cotton seed. (x) Raw jute (xi) Any other class of commodity, the central government may notify from time to time. As per the act. food crops includes crops of sugarcane. Sugar means any form of sugar containing more than 90 percent of sucrose, including sugar candy, khandsari or any sugar crystalline or powdered form
The power of central government to make regulation
The regulation that the central government can make may include the following: (1) By way of grant of license and permits, either for the production and manufacture of goods or for storage, transport and distribution of goods, disposal, acquisition of essential commodities etc. (2) For bringing under cultivation any waste or arable land; (3) For controlling the price at which the essential commodity may be bought or sold; (4) For prohibiting the withholding from sale of any essential commodity, ordinarily kept for sale; (5) For regulating or prohibiting any class of commercial or financial transactions relating to food stuffs or cotton textiles which, in the opinion of the authority making order, are, if unregulated are, likely to be, detrimental to the public interest etc.
Imposition of duties on state government (Section 4)
As per section 4, The central government has been authorized to: (1) Confer powers and impose duties upon the (a) State government or (b) Officers or authorities of central government or state government & (2) Issue directions to the state government or officers or authorities thereof as to the exercise of powers or the discharge of any duties.
Punishment for Violating the Act
Offenders will be put on trial under the Essential Commodities Act, 1955 (10 of 1955) or any other as mentioned for the wrongful act. The trail shall be executed by a special court or a special designated court, and all offences under the Act are non-bailable. Any person or organisation found guilty of violating the act will lead to the detention of the business following with a jail term for the individual.
Absconding or Avoiding the Order
Any individual absconding or avoiding the order should be reported to the Metropolitan or Judicial magistrate. The punishment shall be implemented under 82, 83, 84 and 85 of the Code of Criminal Procedure. If proven guilty after the examination of records and books, a jail term up to a year will be handed out for minor offences. For major offences, the jail term can be extended up to seven years with fine or both.
Burden of proof in certain cases (Section 14)
Under this Act, it is said that the burden of proof shall always lie upon the person who possesses any essential commodity without having any lawful authority or permit or license.
Prosecution of action taken under the Act (Section 15)
This section provides that no prosecution or proceeding shall be instituted against the person who acted in good faith or in pursuance of the order made under Section 3.
Offences by the company (Section10)
When the above offences are committed by any company. Then every person who is in charge or responsible for the conduct and business of the company is held guilty for the offences and is liable for the punishment. For the purpose of this Section, the term ‘company’ generally includes a body corporate, a firm, or any other association of individuals.
Penalties (Section 7)
There are different kinds of penalties imposed upon different kinds of offences.
OFFENCES
PENALTIES
Contravene the order made under clause (h) and (i) of the Sub Section (2)
Imprisonment for a term which may extend to 1 year with fine
Contravene the other orders except above two.
Imprisonment not less than 3 months which may extend up to 7 years with fine
Fails to comply with the direction given under clause (b) of Sub-section (4)
Imprisonment not less than 3 months which may extend up to 7 years with fine
If any person convicted for offences under Section Sub-clause (ii) of clause (a) of Sub-section (1) or under Sub-section (2) again convicted on the same provision
Imprisonment not less than 6 months which may extend up to 7 years with fine
If the offences convicted under Sub-clause (ii) of clause (a) of Sub-section (1) or under Sub-section (2) does not cause any substantial harm to any individual or the general public.
Imprisonment for the term of 3 months or 6 months whichever is required as per the case
However, it is provided that when any person liable for punishment successfully proved that the contravention has been taken place without his knowledge and he exercised due diligence at the time of contravention to prevent it then he would not become liable for any punishment for such offence.
State of Bombay v. Virkumar Gulab Chand Shah AIR 1952 SC335, In this case, it was established that the foodstuff includes raw material, things used in the process and things used in the preparation of food. Therefore, turmeric has been included in the scope of foodstuff.
S.Samuel, M.D., Harrisons v. Union of India 2004 SSC 256, In this case,it was decided that tea is not a foodstuff and merely a stimulant. It neither used in the preparation of food nor contains any nutritional value, however in general parlance also when a person takes tea doesn’t consider it as having food.
Conclusion
The Essential Commodities Act,1955 is one of the important laws of the country that applies for the protection of the interest of the general public. Under this Act, the Central Government possesses a wide range of powers to control the production and supply of essential commodities. Under this Act, the Central Government controls the price of the confiscated or seized essential commodities. All these powers are necessary to maintain the market.
However,the government can regulate these agricultural foodstuffs at times of war or any other calamity. This will ensure private as well as foreign investments in the agricultural sectors. There is a possibility of introduction of new technologies in the cold storage’s and food supply chain. There is a possibility that the governments aim to double the farmers income by 2022 might be possible because of the investment in the cold storage and the agriculture sector.
In India, several Acts and Orders are in force for implementation with a view to protect the consumer against adulteration and unfair practices. AGMARK acts as a “third party” guarantee for the agricultural products that are produced and consumed in India. The system traces its origin to 1934, where Archibald MacDonald Livingstone, Agricultural and Marketing Advisory to the Government of India, suggested that this certification come into force to benefit the local growers and prevent undue exploitation by the dealers of the produce. The starting point of quality control in India was the enactment of Agricultural Produce (Grading & Marking) Act, AGMARK,1937.
Agricultural Produce (Grading & Marking) Act, 1937 provides for the grading and marking of agricultural and other produce. The term AGMARK was coined by joining the words ‘Ag‘ to mean agriculture and ‘Mark’ for a certification mark. AGMARK, or Agriculture Mark, is the certification mark to assure the quality of agricultural products in India.
The Act empowers the Central Government to make Rules for :
(a) Fixing grade designations to indicate quality of any scheduled article.
(b) Defining the quality indicated by every grade designation, and
(c) Specifying grade designation marks to represent particular grade designation.
AGMARK
It is a quality certificate that labels a product pure and of necessary quality as per guidelines specified by a governing body. It acts as a third-party guarantee for agricultural products consumed in India. The quality of an agricultural commodity is based on its intrinsic merit, and these standards are devised keeping in mind International laws and specifications so that we comply with the WTO requirements.
Objective of AGMARK Grading Scheme
The main objective is to provide consumers with quality, unadulterated products. The grading can be used for both domestic and export purposes.
Features of AGMARK
This is issued by the Directorate of Marketing and Inspection, under the Ministry of Agriculture and Farmers Welfare, of the Government of India for agricultural products.
It covers quality guidelines for more than 200 different Commodities ranging from pulses to cereals, from essential oils to semi-processed food like vermicelli.
The head office is in Faridabad.
The central AGMARK Laboratory is in Nagpur and 11 state owned AGMARK labs are found in 11 nodal cities.
It is legally enforceable as per the Agricultural Produce (Grading and Marking) Act of 1937 (amended in 1986).
The application processes are done online via the platform created by the National Informatic Centre (NIC).
The standards for AGMARK are framed based on the Food Safety and Standards Act, 2006, the Codex Alimentarius Commission, and the International Organisation for Standardization.
AGMARK certification is voluntary except for edible vegetable oils and fat spread which is mandatory as per FSSAI Regulations, 2006.
Advantage of AGMARK
An agricultural product gains advantages and legal importance thanks to the AGMARK registration. AGMARK registration provides the consumer with assurance regarding the product’s organic integrity and quality. These standards are compliant with WTO rules (World Trade Organisation). As a result, the AGMARK certification aids a product’s ability to compete in global marketplaces. Agriculture products that have successfully completed the AGMARK registration process are given subsidies by the government. As a result, farmers benefit from it.
STANDARDIZATION AND GRADING OF AGRICULTURAL COMMODITIES
1.Grading provides description of the quality of the consignment and assists in the formation of a legally binding agreement.
2. It facilitates proper marketing of agricultural commodities.
3. It also ensures that agricultural commodities move through the market faster and without obstructions.
4.This also facilitates transactions without physical verification by the distant buyers.
Advantages of Grading
1.It brings confidence between the buyer and the seller.
2.It facilitates interstate and international marketing.
3. Disputes in the market can be solved in a good manner.
4. Stability of the price is ensured.
5.Farmers can take loans easily from the banks on the basis of grades of produce.
6.Arbitrary fixation of price by middlemen is eliminated.
7.Brings about improvement of the crop.
8.Reduces risk of producer and seller in transactions.
9.Future marketing is facilitated. Grades become a commercial measure of quality.
10.It also helps in implementation of contract farming.
Formulation of Grade Standards
Standards of agricultural commodities are framed in a scientific way. Basically it involves the following steps.
Agricultural commodity for which grade standards are to be framed is selected keeping in view national priority, necessity and demand.
A sampling plan is prepared based on the areas in which the commodity is grown, processed and traded.
Physical and chemical parameters to determine the purity and quality of the commodity are identified.
Samples of the commodity are collected by the field offices from growing areas, whole sale and retail markets as per the sampling plan.
The samples are analysed in the Regional Agmark Laboratories and Central Agmark Laboratory for the identified parameters.
Analytical data obtained is statistically analysed and Central Agmark Laboratory suggests the limits of various quality parameters for different grades.
The specifications of the commodity prescribed in Prevention of Food Adulteration Rules, 1955 and international standards viz. Codex Alimentarius Commission, ISO, etc. are consulted.
The relevant Committee on Agmark standards discusses the draft standards with trade, industry and consumer organizations.
Preliminary Grading & Marking Rules for the Commodity are drafted and are vetted by the Ministry of Law & Justice, translated into Hindi and published in the Gazette of India for inviting comments and suggestions from all stake holders.
The comments/suggestions received are considered and final notification is drafted, vetted by the Ministry of Law & Justice, translated into Hindi and published in the Gazette of India.
STANDARDIZATION AND GRADING OF AGRICULTURAL COMMODITIES
Following Commodities on Agmark standards have been constituted: 1. Food grains and Allied Products. 2. Oils Seeds, Vegetable Oils & Dairy Products. 3. Essential Oils. 4. Spices and Condiments. 5. Fruits and Vegetables. 6. Other Commodities.
GRADING AND CERTIFICATION of AGRICULTURAL COMMODITIES
Promotion of standardization and grading of agricultural and allied produce is one of the important activities of the Directorate of Marketing & Inspection.
Grading is carried out in accordance with the standards notified.
It serves a means of describing the quality of commodities to be purchased or sold by the buyers or sellers all over the country and abroad.
This also establishes a common trade language and avoids the need for physical checking and handling at many points.
The system of grading and certification benefits both the sellers and buyers in view of the fact that the producer get the price with the quality produced by him and consumer gets a quality product in turn of money spent.
Grading and certification activities can be broadly classified into (i) Grading and Certification for Internal Trade (ii) Grading and Certification for Exports.
Documents to be given along with application
1. Sketch of the premises
2. Declaration regarding i. Proprietorship/Partnership etc ii. Ownership of the premises iii. Ownership of trade brand label iv. Use of good grade quality containers for packing commodities. All declarations have to give by notary public.
3. A copy of licence from Panchayat/Municipality.
4. Bank reference: – Letter from the bank regarding the transaction to the packer with the bank.
5. List of machineries.
6. Specimen signature of authorised persons attested by the proprietor/managing partner.
7. Medical fitness certificate of employee.
8. Specimen copy and sketch of trade brand label
Consumers not satisfied with the quality of agricultural produce certified under Agmark, can make a complaint to the Agricultural Marketing Adviser giving full particulars regarding Agmark label/replica serial number, lot no., date of packing, best before date, trade brand, name and address of the authorized packer and the name and address of the seller. Whenever the complaint is found to be genuine, action as deemed fit will be taken against the concerned authorized packer as per provision in APGM Act-1937.
Benefits of AGMARK
Farmers are befitted as the state offers more subsidies to those products that carry the mark.
Marketing of the product finds a boost.
The quality of the product is sustained by virtue of statutory compliances.
Difference Between FSSAI and AGMARK
The primary difference between the FSSAI and AGMARK is that AGMARK works as a certification while FSSAI is a government agency that works on food control. AGMARK works exclusively for agricultural products whereas FSSAI licensing covers almost every food item, whether it is of agrarian origin or not. It covers all processes of food processing, from manufacturing to packaging
FSSAI was a direct result of the Food Safety and Standard Act, 2006, while AGMARK comes under the Agriculture Produce (Grading and Marketing) Act of India, 1937
AGMARK certification deals with chemicals, microbiological experiments, pesticide residue, and aflatoxin levels. AGMARK is given only for the product and not for an individual farmer. As of now, 213 agricultural products come under AGMARK certification. FSSAI License is allotted for individual establishments. Every branch of a fast-food restaurant chain requires an FSSAI licence, even if all branches come under one franchise. FSSAI has three types of licences: basic, state and central.
AGMARK is approved by the directorate of marketing and inspection which falls under the Department of Agriculture. FSSAI is a government authority of its own.
PENALITY:
Section
Concept
Penality
Sec.4
Penalty for unauthorised marking with grade designation mark.
6 Months & 5000-fine
Sec.5
Penalty for counterfeiting grade designation mark.
3 years & 5000-fine
Sec. 5 a
Penalty for selling migraded articles.—
6 Months & 5000-fine
Conclusion:
AGMARK is a Quality Certification Mark as a third-party guarantee to certified quality, which assures that the products conform to the standards laid down by the government of India is called Agmark certification. It is basically a voluntary certification for various agricultural food products but for some products, it has been made compulsory vide Food Safety and Standards (Prohibition and Restriction on Sales) Regulation 2011. AGMARK certification assures that the product containing the Agmark is good in terms of quality and produced in hygienic condition thereby fit for human consumption. It is useful both for consumers and producers, marketers and traders. Food products where AGMARK has been made mandatory, along with a license or registration under Food Safety and Standards Act, 2006. It is mandatory for the Food Business Operators to print the AGMARK logo along with the certification number on the primary packaging material along with the FSSAI logo and FSSAI license/registration number on food items where AGMARK certification is mandatory.
Grade standards notified as per the provisions of the Act are popularly called AGMARK Standards. These standards differentiate between quality and 2- 3 grades are prescribed for each commodity. Different grades are prescribed based on intrinsic quality of the agricultural commodities and various other parameters related to cleanliness, extraneous matter, active components, etc.
Grades help farmers/traders to get prices for agricultural commodities on the quality produced by them. Consumers get the produce of the quality desired by them. Till date, grade standards for 205 agricultural commodities have been notified.These include cereals, pulses, oilseeds, fruits and vegetables, creamery butter & ghee, vegetable oils, spices, honey, wheat atta, besan, etc.
Chapter IV of the Act deals with the Establishment, Qualifications, Jurisdiction, Manner of Complaint, Proceedings etc. regarding the Consumer Disputes Redressal Commission. CDRC is empowered to resolve complaints with respect to unfair and restrictive trade practices, defective goods and services, overcharging and goods which are a hazard to life and safety. It has to be set up at three levels, i.e. the District, State and National levels (commissions). In comparison to the old Act, the jurisdictions of the commissions have been enhanced.
The Act proposes the establishment of the Central Consumer Protection Authority (CCPA) as a regulatory authority.
The CCPA will protect, promote and enforce the rights of consumers and regulate cases related to unfair trade practices, misleading advertisements, and violation of consumer rights.
CCPA would be given wide-ranging powers.
The CCPA will have the right to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses, impose penalties and file class-action suits.
The CCPA will have an investigation wing to conduct independent inquiry or investigation into consumer law violations.
POWERS AND FUNCTIONS OF CENTRAL CONSUMER PROTECTION AUTHORITY
The Central Authority enjoys wide powers under the Act and can discharge regulatory, investigative or adjudicatory functions.
Under section 18(1) the Central Authority has the power to:
Protect, promote and enforce the rights of consumers as a class, and prevent violation of consumers rights under this Act.
Prevent unfair trade practices and ensure that no person engages himself in unfair trade practices.
Ensure that no false or misleading advertisement is made of any goods or services which contravenes the provisions of this Act or the rules or regulations made under this Act.
Ensure that no person takes part in the publication of any advertisement which is false or misleading.
For the above-mentioned purposes, the Central Authority under section 18(2) has the power to:
Inquire or cause an inquiry or investigation to be made into violations of consumer rights or unfair trade practices, either suo motu or on a complaint received or on the directions from the Central Government.
File complaints before the District Commission, the State Commission or the National Commission, as the case may be, under this Act.
Intervene in any proceedings before the District Commission or the State Commission or the National Commission, as the case may be, in respect of any allegation of violation of consumer rights or unfair trade practices.
Review the matters relating to, and the factors inhibiting enjoyment of, consumer rights, including safeguards provided for the protection of consumers under any other law for the time being in force and recommend appropriate remedial measures for their effective implementation.
Recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights.
Undertake and promote research in the field of consumer rights.
Spread and promote awareness on consumer rights.
Encourage non-Governmental organisations and other institutions working in the field of consumer rights to co-operate and work with consumer protection agencies.
Mandate the use of unique and universal goods identifiers in such goods, as may be necessary, to prevent unfair trade practices and to protect consumers’ interest.
issue safety notices to alert consumers against dangerous or hazardous or unsafe goods or services.
advise the Ministries and Departments of the Central and State Governments on consumer welfare measures.
issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.
District Consumer Disputes Redressal Commission (previously known as the District Forum):
District Commission shall consist of a President and not less than two and not more than such number of members as may be prescribed, in consultation with the Central Government. The District Commission now has the jurisdiction to entertain complaints where the value of the goods and services paid as consideration does not exceed one crore rupees. Section 34 (2) (d) categorically states that the complaint can now also be instituted in a District Commission within the local limits of whose jurisdiction the complainant resides or personally works for gain, apart from filing in the jurisdiction where the other side actually or voluntarily resides, or carries a business, or has a branch office or personally works for gain.
State Consumer Disputes Redressal Commission (previously known as the State Commission):
The State Commission shall have jurisdiction to entertain the complaints where the consideration exceeds one crore rupees but does not exceed ten crore rupees.
National Consumer Disputes Redressal Commission (previously known as the National Commission):
The National Commission shall have the jurisdiction to entertain complaints where the consideration paid exceeds ten crore rupees. The jurisdiction in which the complaint is to be filed is now on the basis of the value of the goods and services paid, which was not the case in the 1986 Act where it was on the value of the goods and services and the compensation, if any, claimed. A great emphasis has been placed on mediation which will be dealt with further.
Basis
District Commission
State Commission
National Commission
Composition
A district commission includes a president and two other members, and one of the members has to be a woman.
A state commission includes a president and at least two other members, and one of the members has to be a woman.
A national commission includes a president and four other members one of whom shall be a woman.
Who can be a President
A working or retired judge of the District Court can be a president of the District Commission.
A working or retired judge of the High Court can be a president of the State Commission.
A working or retired judge of the Supreme Court can be a president of the National Commission.
Appointment of President
By taking the recommendation of the selection committee, the state government appoints the president of the District Commission.
After consulting with the Chief Justice of the High Court, the state government appoints the president of the State Commission.
After consulting with the Chief Justice of India, the central government appoints the president of the National Commission.
Jurisdiction
One can file a complaint for goods and services of ₹1 crore or less.
One can file a complaint of goods and services worth less than ₹10 crores and more than ₹1 crore.
One can file a complaint of goods and services worth more than ₹10 crores.
Appeal against orders
If the aggrieved party is not happy with the jurisdiction of the district commission, then they can appeal against its judgment in the State Commission within 45 days.
If the aggrieved party is not happy with the jurisdiction of the state commission, then they can appeal against its judgment in the National Commission within 30 days by depositing 50% of the fine money.
If the aggrieved party is not happy with the jurisdiction of the national commission, then they can appeal against its judgment in the Supreme Court within 30 days by depositing 50% of the fine money. However, one can file the complaint only when the value of goods and services exceeds ₹10 crores.
Mediation
The Act has introduced a new chapter (Chapter V) on mediation as an alternate dispute resolution mechanism in order to resolve the consumer dispute in a much faster way without having to approach the Commissions. Thus, in the events where the mediation is successful in whole, the terms of such agreement shall be reduced into writing accordingly. Where the dispute is settled only in part, the Commission shall record the statement of the issues which have been settled, and shall continue to hear the remaining issues involved in the dispute. In case of unsuccessful mediation the respective Commission shall within seven days of the receipt of the settlement report, pass a suitable order and dispose of the matter accordingly.
Offences and Penalties
Section 21(2) and Section 89 of the 2019 Act provides the Central Authority with the power to impose a penalty in respect of any false ormisleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees. Apart from this, a separate chapter (Chapter VII) for offences and penalties has been introduced where detailed penalties and punishments have been mentioned in relation to non-compliance, or manufacturing for sale or storing, selling or distributing or importing products that are adulterated or spurious.
Related Rules and Regulations
The Consumer Protection (E-Commerce) Rules, 2020 which are mandatory and are not advisories, lay down all the important information relating to the e-commerce entities keeping in mind both the consumer and the product/service provider. Key highlights are:
E-Commerceentities according to Rule 5 are required to provide information to consumers, relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options and country of origin.
These platforms will have to acknowledge the receipt of any consumer complaint within 48 hoursand redress the complaint within one month from the date of receipt. They will also have to appoint a grievance officer for consumer grievance redressal.
Sellers cannot refuse to take back goods or withdraw services or refuse refunds,if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform.
The rules also prohibit the e-commerce companies from manipulating the priceof the goods or services to gain unreasonable profit through unjustified prices.
As per the Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020 which came into force on 20th July 2020, the amount of fee payable for filing the complaint in the District Commission up to Rs 5 lakhs has been made Nil according to Rule 7.
The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare Fund(CWF).
State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, the pendency of cases and other matters.
Apart from these general rules, there are Central Consumer Protection Council Rules, provided for the constitution of the Central Consumer Protection Council(CCPC).
It will be an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields.
It will have a three-year tenure and will have Minister-in-charge of consumer affairs from two States from each region: North, South, East, West, and North-East Region.
Conclusion
The 2019 Act is a much required change in favor of the consumers considering the current age of digitization. It empowers them with clearly defined rights and dispute resolution process which will enable them to get their grievance addressed with a fast track mechanism.
In order to have a better understanding of the concepts have a glance over some of the landmark judgments given by our Courts according to the Consumer Protection Act, 1986 which is now repealed but the guidelines laid down in those cases helped in framing the new Consumer Protection Act, 2019.
The Delhi High Court while examining the concept of advertisement decided the case of,
Horlicks Ltd. v. Zydus Wellness Products Ltd., 2020 SCC Online Del 873
The High Court passed an interim order restraining Zydus from telecasting its advertisement comparing Complan to Horlicks on the grounds that the same was misleading and disparaging. The Court relied on various judgments on misleading advertisements, disparagement and law governing publication of advertisements on television. Major decisions were:
Dabur (India) Ltd. v. Colortek (Meghalaya) (P) Ltd., 2010 SCC Online Del 391
The Delhi High Court culled out the principles governing disparagement in the advertisements and held:
On the basis of the law laid down by the Supreme Court, the guiding principles for us should be the following:
(i) An advertisement is commercial speech and is protected by Article 19(1)(a) of the Constitution.
(ii) An advertisement must not be false, misleading, unfair or deceptive.
(iii) Of course, there would be some grey areas but these need not necessarily be taken as serious representations of fact but only as glorifying one’s product.
To this extent, in our opinion, the protection of Article 19(1)(a) of the Constitution is available. However, if an advertisement extends beyond the grey areas and becomes a false, misleading, unfair or deceptive advertisement, it would certainly not have the benefit of any protection.
Pepsi Co. Inc. v. Hindustan Coca Cola Ltd.,2003 SCC Online Del 802
In Pepsi Co. it was held that certain factors had to be kept in mind while deciding the question of disparagement. Those factors were:
(i) Intent of the commercial,
(ii) Manner of the commercial, and
(iii) Story line of the commercial and the message sought to be conveyed.
These factors were amplified or restated in the following terms:
“(1) The intent of the advertisement – this can be understood from its story line and the message sought to be conveyed.
(2) The overall effect of the advertisement – does it promote the advertiser’s product or does it disparage or denigrate a rival product?
In this context it must be kept in mind that while promoting its product, the advertiser may, while comparing it with a rival or a competing product, make an unfavorable comparison but that might not necessarily affect the story line and message of the advertised product or have that as its overall effect.
(3) The manner of advertising – is the comparison by and large truthful or does it falsely denigrate or disparage a rival product? While truthful disparagement is permissible, untruthful disparagement is not permissible.”
Drugs Enquiry Committee was appointed by the Government in 1931 under the chairmanship of Colonel R.N.Copra to have control over the import, manufacture and sale of drugs. Thus Finally, to control the import, manufacture, distribution and sale of drugs and cosmetics, the Drugs and Cosmetics Act was passed on 10th April 1940 by the Indian Legislature.
The drug is an essential commodity and is required to be regulated in terms of its import, manufacture, sale and distribution. The Central Government and State Government are charged with the responsibility of providing the drugs of desired quality to needy patients and in order to ensure this primary obligation of the Government, the network is required to be developed to root out adulterated misbranded and spurious drugs from society.
Objective
For preventing substandard drugs, probably for treatment and preserving high medical standards.
For controlling the import, manufacture, distribution, and sale of drugs and cosmetics by licensing.
Ensuring that the manufacture, distribution, and sale of drugs and cosmetics are done by qualified persons only.
For controlling the manufacture, and sale of Ayurvedic, Siddha, and Unani drugs.
Establishment of Drugs Technical Advisory Board (DTAB) and Drugs Consultive Committees (DCC) for Allopathic and Allied drugs and Cosmetics.
Salient features of the Drugs and Cosmetics Act
The Act has made a significant effort toward regulating the pharmaceutical industry in India and hence ensuring the protection of the health and safety of the public. Some of the salient features of the Act can be summed up as follows:
The maximum penalty is life imprisonment and a fine of Rs. 10 lakhs or three times the confiscated goods’ value, whichever is greater.
Other gazette officers, in addition to officers from the Drug Controller’s Office, are authorised to initiate prosecution under the Act; some of the offences are cognizable and non-bailable;
Specialised courts for the trial of offences covered by the Act;
Provision for the aggregation of minor offences.
Definitions
1. Drug( Sec.3)
(i) All medicines for internal or external use of human beings or animals and substances used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals including, preparations applied on human body for the purpose of repelling insects like mosquitoes. (ii) The substances other than food which may affect the structure or any function of the human body or used for the destruction of insects or vermin which cause disease in human beings or animals as specified from time to time by the Central Government by notification in the Official Gazette. (iii) The substances used as components of a drug including, empty gelatin capsules. (iv) The devices used for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette after consultation with the Drugs Technical Advisory Board (DTAB).
Cosmetic
It means any article intended to be sprayed, poured, rubbed or sprinkled on, introduced into, or applied to the human body or any part for cleansing, beautifying, promoting attractiveness or altering the appearance. It also includes any articles intended for use as a component of cosmetics.
Ayurvedic, Siddha or Unani Drugs
These include all medicines used for internal or external purposes or used in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals and manufactured exclusively in accordance with the formulae described in the authoritative books of Ayurvedic, Siddha and Unani Tibby Systems of Medicines specified in the First Schedule to the Drugs and Cosmetics Act, 1940.
Gudakhu
It is a tobacco product used for rubbing against human teeth. It contains tobacco powder, lime and molasses along with red mineral matter. It is a cosmetic within the provisions of the Act.
Patent or Proprietary Medicine
It means: (i) In relation to Ayurvedic, Siddha or Unani System of Medicine, all formulations containing only such ingredients mentioned in the formulae described in the authoritative books of Ayurvedic, Siddha or Unani System of Medicine specified in First Schedule to the Act but do not include the medicine .administered by parenteral route. (ii) In relation to any other system of medicine including, allopathic, a drug presented in a form ready for internal or external administration of human beings or animals and which is not included for the time being in the editions of Indian Pharmacopoeia or any other Pharmacopoeia.
Misbranded Drug (Sec. 9)
A drug is considered a misbranded drug: (i) if it is not labelled in the prescribed manner, or (ii) if it is so coloured, coated, powdered or polished that damage is concealed or it is made to appear of better or greater therapeutic value than it really is, or (iii) if the label or container or anything accompanying the drug bears any statement, design or device which makes any false claim for the drug or gives misleading information.
Adulterated Drug (Sec.9A)
A drug is considered to be adulterated: (i) if it consists in whole or in part of any filthy, putrid, or decomposed substance, or (ii) if it has been prepared, packed or stored under poor sanitary conditions whereby, it may have been contaminated with filth and rendered injurious to health, or (iii) if the container of the drug is composed in whole or in part of any poisonous substance which may render the contents injurious to health, or (iv) if it contains a colour other than the one which is prescribed, or (v) if the drug contains any harmful or toxic substance which may render it injurious to health, or (vi) if the drug is admixed with any substance so as to reduce its quality or strength.
Manufacture in relation to Drugs or cosmetics.
Any process fully or partly used for making, altering, ornamenting, finishing packing, labelling, breaking up or otherwise treating or adopting any drug/cosmetic with a view to its sale or distribution but, does not include the compounding or dispensing of any drug or the packing of any drug or cosmetic in the ordinary course of retail business.
Spurious Drug (SEC.9B)
A drug is deemed to be a spurious drug: (i) if it is imported under a name which belongs to another drug, or (ii) if it is an imitation of or a substitute for another drug or if it resembles another drug in a manner likely to deceive or bears upon it or its label or container the name of another drug, or (iii) if it has been substituted wholly or in part by another drug substance, or (iv) if it claims to be the product of a manufacturer or company of whom it is not truly a product.
Misbranded Cosmetic(Sec.9C)
A cosmetic shall be deemed to be misbranded: (i) if it contains a colour which is not prescribed, or (ii) if it is not labelled in the prescribed manner, or (iii) if the label or container or anything accompanying the cosmetic bears any statement which is false or misleading.
Spurious Cosmetic(Sec.9D)
A cosmetic shall be deemed to be spurious: (i) if it is imported under a name which belongs to another cosmetic, or (ii) if it is an imitation of or a substitute for another cosmetic; resembles another cosmetic in a manner likely to deceive, or bears upon it or upon its label or container the name of another cosmetic, or (iii) if the label or container bears the name of an individual or a company purporting to be the manufacturer of the cosmetic which individual or company is fictitious or does not exist, or (iv) if it purports to be the product of a manufacturer of whom it is not truly a product. Schedules to the Act and Rules [2] There are two Schedules to the Act and 35 Schedules to the Rules.
The Schedules to the Act
First Schedule: It comprises the list of books of references for Ayurvedic, Siddha and Unani medicines. There are 57 books of Ayurveda, 30 books of Siddha and 13 Unani Tibb systems listed in the Schedule which are used for different formulations in accordance with the provisions of the Act.
Second Schedule: It comprises the standards to be complied with for imported drugs, manufacture of drugs, their sale, stocking and storage etc.
Drug Technical Advisory Board (DTAB) :
Drugs Technical Advisory Board is constituted by Central Government and its works to advise the Central Government and State Government on technical matters(Advise technical bases) It is a statutory board established by the Central Government under the provisions of this Act to advise the Central Government and State Governments on all technical matters pertaining to the Act, as well as to establish guidelines for types of formulations as and when requested by the Central Government. It is a technical advisory body composed of members who are ex-officio, nominated, and elected. The DTAB has a total of 18 members who represent various aspects of the pharmacy and medical professions in the country. The Chairman of the DTAB is the Director General of Medical and Health Services, Government of India, and the Member Secretary is the Drugs Controller General of India. The DTAB’s headquarters are located at the ministry of Health and Family Welfare, Government of India, Nirman Bhavan, New Delhi.
Drugs Consultative Committee (DCC)
It is the Advisory Body appointed by the central government under Section 7 to advise the central and state governments, as well as the DTAB, on matters pertaining to the uniform implementation of DCA and Rules provisions. The DCC is made up of two representatives nominated by the central government and one representative each from the state government and the union territory. The state government or union territory usually appoints the Director of Drug Control Administration or Drug Controller of the State to this Council.
Central Drug Laboratory (CDL)
The Act directed the establishment of a Central Drug Laboratory (CDL) under Section 6 in Kolkata, and it will be headed by a director appointed by the central government. It is the “Statutory Analytical Laboratory for drugs and cosmetics under DCA whose decision with regards to analysis is final in the court of law.”
Functions of the Central Drug Laboratory
The CDL is responsible for performing various functions, which are:
It analyses drug and cosmetic samples sent by customs collectors and different courts.
As directed by the central government, it advises the central government, state governments, and union territories on drug and cosmetic analysis aspects, and it also undertakes analytical work of a particular nature for samples sent by the central government and state governments.
It may accept samples for analysis in exchange for a fee from private parties, consumer organisations, and so on.
It is involved in research for the development of newer drug and cosmetic analysis techniques.
Drug Inspector :
In relation to any drug or cosmetic, Drug Inspector appointed by Central Government or State Government under section 21; or In relation to Ayurvedic, Siddha or Unani systems of Medicine, a Drug Inspector appointed by the Central Government or State Government
Inspection of drugs and cosmetics:
The central and state governments are empowered to nominate inspectors for the purposes of inspection of drugs and cosmetics, having the necessary qualifications, in various areas with such powers and obligations as may be prescribed. However, it is not possible to nominate any person who has any financial interest in importing, producing or selling drugs or cosmetics as an inspector.
Role of an Inspector, powers and the procedure of Inspection:
Here, every Inspector is deemed to be a public servant within the meaning of section 21 IPC and is officially subordinate to the authority, specified by the appointing government. According to section 22 of the act, which defines the powers of inspectors, they have multifarious powers including the power to inspect, conduct searches, examine samples, call records etc. They can, therefore, inspect any premises wherein any drug or cosmetic is being manufactured, sold, stocked or exhibited or offered for sale or distribution or where any other related activity is being taken with respect to them. Further, an inspector can, on a reasonable belief, search any person who may have secreted any drug or cosmetic or enter and search any place on a similar belief. Moreover, the provisions of Cr.P.C. apply to any such search or seizure as they apply to any search or seizure made under the authority of a warrant issued under section 94 of the Code.
The Procedure of Inspection has been defined under section 23 of the act, it explains the different courses of inspection for different scenarios. Such as the procedure for taking a sample of a drug or cosmetic for the purpose of test or analysis, where the sample is taken from manufacturing premises and where an Inspector conducts a search of a person, place or vehicle regarding any secreted drugs or cosmetics. After all the aforementioned prerequisites are covered under the procedure of Inspection, Section 25 requires a government analyst to whom a sample of any drug or cosmetic has to be submitted. And, the same shall be received by any person or any recognized consumer association.
Penalties under the Drugs and Cosmetics Act, of 1940
The offences and penalties under the Act can be summed up as follows:
Any adulterated or counterfeit drug or cosmetic imported into the nation in contravention of the Act’s requirements is punishable by up to three years in prison and a fine of up to 5,000 rupees.
Any medicine or cosmetic other than the one mentioned in the above point that is illegally imported is subject to a six-month prison sentence, a fine of Rs. 500.00, or both.
Any medication or cosmetic imported in violation of the terms of a notification issued under Section 10 A is punished by up to three years in prison or a fine of Rs. 5000.00
CASE LAWS
Sri G Ramesh Reddy vs The State By Drugs Inspector SC held that The judge, reaffirmed rulings in earlier cases of a similar kind, holding that a director may not be involved in a company’s daily operations. As a result, the director cannot be immediately implicated simply because of his position unless there is prima facie evidence that the director performed a specific act that led to the commission of the crime.
Court held in Commissioner of Central Excise, Calcutta v. Sharma Chemical Works reported in 2003 (5) SCC 60 has also disapproved the approach of the Department in holding that the product was a cosmetic only because it was not sold by chemists or under doctors prescription. This, according to the decision, does not by itself lead to the conclusion that it is not a medicament. The Court reaffirmed the test as categorically laid down in Shree Baidyanath, namely, that the burden of proof that a product is classifiable under a particular tariff head is on the revenue and must be discharged by proving that it is so understood by consumers of the product or in common parlance. See also Meghdoot v. Commisisoner of Central Excise : 2004 (174) ELT 14 (S.C.).”
In the case of Commissioner of C. Ex., Calcutta-IV vs. Pandit D.P. Sharma reported in 2003 (154) ELT 324 (SC), the question was whether ‘Himtaj Oil‘ is a Ayurvedic medicament or not classifiable under sub-heading 3003.30 or a ‘perfumed hair oil’ classifiable under sub-heading 3305.10. Even though reliance had been placed upon the authority of this Court in Shree Baidyanath Ayurved Bhavan’ case (supra), this Court negatived an argument that the product would not be considered to be a drug because it was not prescribed by a medical practitioner and was one which could be used for a long period of time. It was held that the test was to see what persons using the product understand it to be. On the basis of evidence produced by the manufacturer that the common man understood the product as a medicine it was held that the product was a medicament.
The basis of the show cause notices was the decision of this Court in Shree Baidyanath Ayurved Bhavan Ltd. vs. Collector of Central Excise, Indore reported in 1996 (9) SCC 402 and the tests allegedly laid down in that decision for determining whether a product should be classified under Chapter 33 or Chapter 30. The two tests according to the show cause notice for determining whether a product was classifiable as a pharmaceutical product under Chapter 30 of the Central Excise Tariff were (1) Whether the products are being used daily and are sold without prescription by a medical practitioner; and (2) whether the products are available in General Store Department / Grocery shops. The department’s case in the show cause notice is that as these two tests were not fulfilled the product failed to come within the prescription of pharmaceutical products in Chapter 30.
Real Estate Regulatory Authority, well known by the name of RERA came into corporeality under the RERA Act 2016 (Real Estate Regulation & Development Act). The RERA Act was put forward with the central aim of protecting property buyers from lopsided and at the same time boosting up the real estate transactions. The official bill associated with the Act was passed by the Rajya Sabha in 2016 on 10th March. Although it came into effect from 1st May 2016. Initially, the bill embraced 52 sections followed by the introduction of 92 sections under the RERA Act.
The rest of the sections came into the workforce from the next financial year in May 2017. RERA is a new domain and for better understanding, you have a lot to explore. In this well-curated guide, we have covered every minute detail that orients around the Real Estate Act 2016 including the RERA meaning, RERA agent registration, benefits of RERA, RERA no, RERA rules for maintenance charges, RERA official website, and much more. Keep scrolling to know everything about the RERA Act, 2016.
Objective of the Act
Enhance transparency and accountability in real estate and housing transactions.
Promote growth through efficient project execution and standardization.
Promote growth through efficient project execution and standardization.
Boost domestic and foreign investment in the real estate sector.
Enhance transparency and accountability in real estate and housing transactions.•Enhance transparency and accountability in real estate and housing transactions.
Promote growth through efficient project execution and standardization.
Importance
RERA offers an array of benefits to agents, promoters, and homebuyers. It somehow turned the table by offering immense distinct benefits to the real estate domain. If you are looking for Why is RERA important then here are the foremost reasons to justify its importance:
Security
As per the Real Estate Regulation and Development Act 2016, a notable amount that is 70 percent from the buyer as well as the investors will be held back within a discrete account. Further this amount is granted to the builders for specific purposes such as construction or other costs associated with land. Regardless of your position i.e., developer or constructor, you are permitted to access at max 10 percent of the mortgage cost in terms of advance payment. This amount is sanctioned prior to signing the final agreement.
Transparency
Constructors are obliged to capitulate all original documents associated with the undertaken projects. However, the builders aren’t allowed to make any sort of changes within the agreed plans especially without the buyer’s consent.
Unbiasedness
RERA have enlightened the developers with the fact that they have to sell all properties thoroughly drew on the carpet area. Considering the property’s super built-up area is outdated, If the RERA approved project somehow gets delayed, the buyers are accredited to ask for the entire paid amount that was initially invested in the property. The buyer is entitled to get their investment back in terms of monthly investments.
Quality
The constructor has to mandatorily rectify any sort of issue that the buyer faces within five years of the property purchase. Additionally, the builder has to rectify the issue in a limited time frame that is 30 days counting from the day when the complaint was made.
Authorisation
A regulator isn’t allowed to advertise, construct, sell, or even book any plot without actually getting registered with the RERA regulator. After registering yourself as a regulator, every advertisement made for specific investments will be allotted with a unique number. It will be distinct for every project and will be generated by RERA.
FEATURES
Establish the Real Estate Regulatory Authority (RERA) for regulation and promotion of the real estate sector.
Ensure sale of plot, apartment of building or sale of real estate project, in an efficient and transparent manner
Ensure protection the interest of consumers in the real estate sector
Establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions.
Regulates transactions between buyers and promoters of residential real estate projects
Residential real estate projects, with some exceptions, need to be registered with RERAs
Promoters cannot book or offer projects for sale without registering them.
Real estate agents dealing in these projects also need to register with RERAs
Amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project.
Right to Legal Representation on behalf of client by Company Secretaries or chartered accountants or cost accountants or legal practitioners
Imposes stringent penalty on promoter, real estate agent and also prescribes imprisonment.
Impact of RERA Act 2016
After the establishment of the Act, the sale deed registration of a RERA approved project can’t be put forward through the sub-registrar office. Initially you have to get Occupancy Certificates also called Completion RERA Certificates. Before its existence, these registrations used to take place without any cross checks.
It used to occur without Occupancy Certificates. No one was actually worried about the infused legal consequences. Even after the RERA Act implications, people aren’t restricting their inappropriate sale deed registrations. Here are certain impacts of the Real Estate Regulation and Development Act 2016:
Decreased number of launched projects as the involved parties will be more indulged in understanding the impact of the Regulation and Development Act. However, the genuine promoters will get huge benefits from this Act as they won’t have to face unbiased competition.
Unauthentic builders will diminish because they will eventually fail to cope with the new RERA guidelines and won’t be able to sustain within the real estate market.
The thirty-two sections added within the Act aim to encourage the overall financial discipline of the real estate sector.
After the implementation of the RERA Act, the developers became bound to follow listed formalities to make any sort of change in the existing project. It may result in a short-term chaos, but the overall significance will be bet-fit for long run. It will help to generate buyers’ interest to invest more in the real estate domain.
Advantages of RERA (Real Estate Development and Regulation Act)2016
Increased FDI
Customer management
Timely completion of the project
Project planning
Transparency
Reduction in litigation
RERA approval and its benefits
Some of the important RERA compliances are:
Informing allottees about any minor addition or alteration.
Consent of 2/3rd allottees about any other addition or alteration.
No launch or advertisement before registration with RERA
Consent of 2/3rd allottees for transferring majority rights to 3rd party.
Sharing information project plan, layout, government approvals, land title status, sub-contractors.
Increased assertion on the timely completion of projects and delivery to the consumer.
An increase in the quality of construction due to a defect liability period of five years.
Formation of RWA within specified time or 3 months after majority of units have been sold.
The most positive aspect of this Act is that it provides a unified legal regime for the purchase of flats; apartments, etc., and seeks to standardise the practice across the country. Below are certain key highlights of the Act:
Establishment of the regulatory authority: The absence of a proper regulator (like the Securities Exchange Board of India for the capital markets) in the real estate sector, was long felt. The Act establishes Real Estate Regulatory Authority in each state and union territory. Its functions include protection of the interests of the stakeholders, accumulating data at a designated repository and creating a robust grievance redressal system. To prevent time lags, the authority has been mandated to dispose applications within a maximum period of 60 days; and the same may be extended only if a reason is recorded for the delay. Further, the Real Estate Appellate Authority (REAT) shall be the appropriate forum for appeals.
Compulsory registration: According to the central act, every real estate project (where the total area to be developed exceeds 500 sq mtrs or more than 8 apartments is proposed to be developed in any phase), must be registered with its respective state’s RERA. Existing projects where the completion certificate (CC) or occupancy certificate (OC) has not been issued, are also required to comply with the registration requirements under the Act. While applying for registration, promoters are required to provide detailed information on the project e.g. land status, details of the promoter, approvals, schedule of completion, etc. Only when registration is completed and other approvals (construction related) are in place, can the project be marketed.
Reserve account: One of the primary reasons for delay of projects was that funds collected from one project, would invariably be diverted to fund new, different projects. To prevent such a diversion, promoters are now required to park 70% of all project receivables into a separate reserve account. The proceeds of such account can only be used towards land and construction expenses and will be required to be certified by a professional.
Continual disclosures by promoters: After the implementation of the Act, home buyers will be able to monitor the progress of the project on the RERA website since promoters will be required to make periodic submissions to the regulator regarding the progress of the project.
Title representation: Promoters are now required to make a positive warranty on his right title and interest on the land, which can be used later against him by the home buyer, should any title defect be discovered. Additionally, they are required to obtain insurance against the title and construction of the projects, proceeds of which shall go to the allottee upon execution of the agreement of sale.
Standardization of sale agreement: The Act prescribes a standard model sale agreement to be entered into between promoters and home buyers. Typically, promoters insert punitive clauses against home buyers which penalised them for any default while similar defaults by the promoter attracted negligible or no penalty. Such penal clauses could well be a thing of the past and home buyers can look forward to more balanced agreements in the future.
Penalty: To ensure that violation of the Act is not taken lightly, stiff monetary penalty (up to 10% of the project cost) and imprisonment has been prescribed against violators.
RERA Benefits
Industry
Developer
Buyer
Agents
Project efficiency and robust project delivery
Common and best practices
Significant buyers protection.
Consolidation of sector (due to mandatory state registration)
Standardization and quality
Increase efficiency
Quality products and timely delivery
Increased transparency
Enhance confidence of investors
Consolidation of sector
Balanced agreements and treatment
Increased efficiency
Attract higher investments and PE funding
Higher investment
Transparency – sale based on carpet area
Minimum litigation by adopting best practices
Regulated Environment
Increase in organized funding.
Transparency – sale based on carpet area
Governance and transparency
Case Laws: 1. Rakesh Kumar Gupta Vs. Ansal API (2017) The RERA Act aims to protect the allottees first and only then the builders and promoters. But there have been instances, where the builders and promoters have to be protected due to a multitude of reasons. The present case relates to an instance where the allottee delayed in the possession of the property by 45 days. This cost the promoter some expenses on maintenance which was huge. 2. Jitendra Jagdish Tulsiani vs. Lavasa Corporation Ltd (2018) The contention of the present case relates to a specific type of transfer of property-lease. RERA Act does not specifically mention what type of transfer comes under its jurisdiction. Therefore, the authorities themselves dismissed the above-mentioned petition. Ratio Decidendi: RERA Act is applicable with the transfer of immoveable property and the regulation of the same. Leasing is a type of transfer and it would come under the ambit of the RERA Act.
RERA impact real estate agents
Under the Real Estate (Regulation and Development) Act (RERA), real estate agents will need to register themselves, to be able to facilitate a transaction. The broker segment in India, is estimated to be a USD 4 billion industry, with an estimated 5,00,000 to 9,00,000 brokers. However, it has traditionally been unorganized and unregulated. “It will bring a lot of accountability in the industry and the ones who believe in professional and transparent business, will reap all the benefits. Now, the agents will have a much larger and responsible role to perform, as they will have to disclose all the appropriate information to the customer and even help them chose a RERA-compliant developer,” says Sam Chopra, founder and chairman of RE/MAX India. With RERA in force, brokers cannot promise any amenities or services that are not mentioned in the documents. Moreover, they will have to provide all information and documents to the home buyers, at the time of booking. Consequently, RERA is likely to filter out the inexperienced, unprofessional, fly-by-night operators, as brokers not following the guidelines will face hefty penalty or jail or both.
Which projects can get RERA approval?
Commercial and residential projects including plotted development.
Projects measuring more than 500 sq mts or 8 units.
Projects without Completion Certificate, before commencement of the Act.
The project is only for the purpose of renovation / repair / re-development which does not involve re-allotment and marketing, advertising, selling or new allotment of any apartments, plot or building in the real estate project, will not come under RERA.
Each phase is to be treated as standalone real estate project requiring fresh registration.
How to register projects under RERA?
Authenticated copy of all approvals, commencement certificate, sanctioned plan, layout plan, specification, plan of development work, proposed facilities, Proforma allotment letter, agreement for sale and conveyance deed to be given when
Applying for project registration with RERA.
Mandatory registration of new and existing projects with RERA before launch.
Registration of agents/brokers with RERA.
Dispute resolution within 6 months at RERA and RERA appellate tribunals.
Separate registration of different phases of a single projects.
Developers to share details of projects launched in last 5 years with status and reason for delay with RERA.
Timely updating of RERA website.
Maximum 1 year extension in case of delay due to no fault of developer.
Annual audit of project accounts by a CA.
Conveyance deed for common area in favour of RWA.
Construction and land title insurance.
Project completion time period.
What information does a builder need to provide under RERA
Number, type and carpet area of apartments.
Consent from affected allottees for any major addition or alteration.
Quarterly updating of RERA website with details such as unsold inventory and pending approvals.
Project completion time frame.
No false statements or commitments in advertisement.
No arbitrary cancellation of units by promoter.
What happens if builder delays possession, as per RERA?
Under Section 18 of the RERA Act, if the possession of the property is delayed on the part of the promoter, a consumer can terminate the agreement and request for refund. The promoter must return the entire amount paid by the consumer with interest. The Section 18 also allows a consumer to continue with the project and claim compensation from the developer for every month of delay until the possession of property.
The rate of interest payable by the developer and the format of such complaint are specified under the RERA Rules that vary from state to state. Consumers can file a complaint against the developer in case of delay in possession under Section 31 of the Act. According to Section 31, any aggrieved person may file a complaint with the regulatory authority for violations of the said act. The complaint can be filed by home buyer as well as Association of Allottees.
How to file a complaint under RERA?
Digbijoy Bhowmik, head of policy, RICS, explains, “Complaints can be filed under Section 31 of the Real Estate (Regulation and Development) Act, 2016, either with the Real Estate Regulatory Authority or the adjudicating officer. Such complaints may be against promoters, allottees and/or real estate agents. Most state government rules, made appurtenant to the RERA, have laid out the procedure and form, in which such applications can be made.
Applicable penalties under RERA
For Buyers
Offence
Penalty
Non-compliance with Real Estate Regulatory Authority
The seller is liable to pay penalty which is usually 5% of the project cost
Non-compliance with – Appellate Tribunal
Up to one year of imprisonment or penalty that is 10% of the project cost or both are applicable in certain case
For Promoters
Offence
Penalty
Non-registration
10 percent of project cost as penalty
Providing false information
Percent of project cost as penalty
Violation of laws
Three years’ of imprisonment/ 10 percent of property cost as penalty , or even both for specific case scenarios
For Agents
Offence
Penalty
Non-registration of real estate projects
INR 10,000 on daily basis to 5 percent of the project cost
Non-compliance- RERA
Daily penalty which can raise to 5 percent of the project value
Non-compliance – Appellate Tribunal
One year of imprisonment/ 10 percent of the project cost as penalty and both in certain cases
Can RERA overturn ‘forced consent’ agreements procured by builders for changing project plans?
Section 14 of the RERA prohibits developers from making any amendments to the sanctioned plan of the project, without theprior consent of the home buyers. As per Section 14, any alteration in the plans and specifications of an individual apartment, is permitted only with the prior written consent of the concerned home buyer. On the other hand, alterations in the layout of the entire project and the common areas of the building, cannot be effected unless the developer obtains the prior written consent of two-thirds of all the home buyers (or allottees) in the project. The Bombay High Court, in the case of Madhuvihar Cooperative Housing Society and others vs Jayantilal Investments and others, 2010 (6) Bom CR 517, had the opportunity to interpret Section 7 of the Maharashtra Ownership of Flats Act (MOFA), 1963, which is similar to Section 14 of the RERA. It held that the consent of a home buyer must be an ‘informed consent’, i.e., one which is freely given after the flat purchaser is placed on notice by complete and full disclosure of the project or scheme that the builder plans to implement. Further, the consent must be specific and relatable to a particular project or scheme of the developer which is intended. The bench further added that blanket or general consents, obtained in advance by developers, particularly during signing of agreements, were legally invalid. As Section 7 of the MOFA is analogous to Section 14 of the RERA, the ruling of the Madhuvihar Cooperative Housing Society case will hold good for all cases that come before the Real Estate Regulatory Authority and the Real Estate Appellate Tribunal.
Rights and duties of Allottees:
Rights
Right to obtain information about the project
Duties
Duty to make payment as agreed.
Right to know the stage-wise time schedule of completion of the project
Duty to pay interest in case of late payment
Right to claim possession of property as declared by the promoter
Duty to participate towards the formation of an association or society or cooperative society of the allottees .
Right to refund and compensation if promoter fails to give the possession.
Duty to take physical possession of property within· a period of two months of the occupancy certificate
Drawbacks and Apprehensions:
1). Who will ensure how much is 70% of the total project cost? Also, the state government can alter this amount to less than 70%.
2). The Bill mandates that 70% of the amount collected from buyers of a project be used only for construction of that project. In certain cases, the cost of construction could be less than 70% and the cost of land more than 30% of the total amount collected. This implies that part of the funds collected could remain unutilized, necessitating some financing from other sources. This could raise the project cost.
3). Builders argue that it will be difficult to sell units on the basis of carpet area in an under-construction property in which many units have been already sold on the basis of super built-up area.
4). Developers say that the main cause of delay is slow approvals from government agencies.
5). Under the Act, if the registration is revoked by the regulatory authority, who will complete the construction?
6). A few consumer activists believe that the real estate regulator may not be effective in the matter of handling complaints. The complaints are already being handled by consumer courts. So they say that there is nothing new. Also, the consumer courts were not effective in the redressal of complaints. They express the same reservations about the regulatory authority also.
7). Does not address important issues like the lengthy process for project approvals, lack of clear land titles, the prevalence of black money etc
8). Since state-level governance is very uneven, this will work patchily. Some states will set up efficient Tribunals and Regulatory Boards; others will not.
9). Many politicians have interests in real estate. That could work both for, and against the concepts of the new Act. Some smart and not-so-crooked politicians will back the new act and use it to accelerate activity. Others will try to hold up the new legislation or subvert it.
The Act was originally enacted in 1986 and the BIS came into existence in December 1986. A new act (to replace the BIS Act of 1986) was introduced in the Lok Sabha in 2015, which was subsequently passed by both houses of the Parliament. The new act came into force in 2017.
Bureau of Indian Standards (hereinafter referred to as ‘BIS’) is a statutory body established under the Bureau of Indian Standards Act, 2016 (hereinafter referred to as the ‘Act’). BIS prescribes the standards for covering goods and systems under the standardization regime. Under the Act, BIS has been identified as the ‘National Standards Body of India’ and is regulated under the Ministry of Consumer Affairs, Food & Public Distribution, and Government of India.
Features
The Act establishes a Bureau for the purpose of standardization, marking and certification of articles and processes.
The Act allows the union government to make it compulsory for certain notified goods, processes, articles, etc. to carry the standard mark in the public interest, safety of the environment, national security or to prevent unfair trade practices.
The BIS Act also allows many types of simplified conformity assessment schemes and this includes self-declaration of conformity against a standard which will offer simplified options to manufacturers to adhere to the standards and get a certificate of conformity.
According to the Act, the central government has the power to appoint any agency or authority (apart from the BIS) to verify the conformity of product & services and issue the conformity certificates.
Additionally, there is a provision in the Act for the recall or repair for products that bear the Standard Mark but do not conform to the required Indian standard.
The Act has identified new areas for standardisation. These include:
Medical devices
Alternate fuels
Smart cities
E-mobility
New and renewable energy
Digital technologies (Artificial Intelligence, Industry 4.0, Blockchain, etc.)
The BIS (Hallmarking) Regulations, 2018 makes the hallmarking of precious metals jewellery and artefacts such as gold and silver mandatory.
The penalty for improper use of the Indian standard mark will be a fine of up to Rs. 5 lakh.
The Act also prescribes penalties for the following points:
The improper use of the standard mark by testing and marking centres
Manufacturing or selling goods & articles that do not carry a standard mark and have been mandated to do so, etc.
Objectives
To harmonize development of standardization, labeling, and quality certification of items.
To give a push to standardisation and quality control in order to promote industry growth and develop while also meeting customer requirements.
To organise technical committees of specialists for the goal of developing such standards.
Functions
BIS through its core activities of standardization and conformity assessment, has been benefiting the economy by providing safe and reliable and quality goods; minimizing health hazards to consumers; protecting the environment, promoting exports and imports substitute; controlling proliferation of varieties etc. The standards and certification scheme of BIS apart from benefitting the consumers and industry also support various public policies especially in areas of product safety, consumer protection, food safety, environment protection, building and construction, etc.
BIS carries out various activities like that of standards formulation, product certification, hallmarking, laboratory services, training services, etc. However, the primary and most recognized objective of BIS is to formulate and prescribe the standards for products for their certification. BIS also ensures the harmonious development of the activities of standardization, marking and quality certification of goods.
schemes of certification
BIS Compulsory Registration Scheme (CRS)
The Ministry of Electronics and Information Technology (MeitY) notified the Compulsory Registration Scheme (CRS) in 2012. It passed the ‘Electronics and Information Technology Goods (Requirement for Compulsory Registration) Order, 2012’ for 15 categories of electronics items. However, it added more electronic and information technology goods under the CRS subsequently.
Under CRS, the manufacturers of the products listed under the CRS have to obtain the BIS certification for those products mandatorily. As per the 2012 order passed by MeitY, a person cannot manufacture, distribute, or store goods for sale or import that do not conform to the Indian Standards specified in the order and bear the standard mark with a BIS unique registration number.
The BIS grants the licence to the manufacturers of the electronic products to use or apply the standard mark with a unique R-number. The manufacturers can obtain BIS certification under the CRS through registration based on self-declaration of conformity for each product by filing Form-I under smart registration.
ISI Mark Scheme Registration for Domestic Manufacturers
The manufacturers of products that come under the compulsory BIS certification (Scheme-I) have to register through the normal procedure. However, certain products that require compulsory certification are also included in the list of products that come under simplified registration. When the compulsory BIS certification products are listed under the products eligible for simplified registration, the manufacturers of such products should register them under the simplified procedure and not through the normal procedure.
Under the normal BIS certification procedure, the manufacturer of the compulsory BIS certification product has to submit the BIS registration application to the authorised officer of the jurisdiction where the manufacturing unit is located. The manufacturer of the products must submit Form V under Scheme-I (BIS registration application) along with the required documents and requisite fees.
The BIS officers will conduct a preliminary factory evaluation after receiving the BIS certification application. The BIS officers will collect samples of the products, test them and obtain an independent testing report. When the products meet the confirmed quality standards, the BIS certification/license is provided. Under this procedure, the BIS license is granted within 4-6 months after submitting the registration application.
Product Certification Scheme – Applicable for tangible products; with some products classified under compulsory certification.
The BIS introduced the simplified procedure to give pace to the process of granting the BIS license. The manufacturers of the products listed under the simplified procedure must mandatorily apply for BIS certification under the simplified procedure. The BIS license is granted within 30 days of submitting the BIS certification application under this simplified procedure.
The manufacturer must submit the BIS registration application, the required documents, self-evaluation reports and test reports of product samples obtained from the approved lab to the respective BIS officer. When the test report meets the standard requirements, the BIS officer will verify the factory and grant BIS certification within 30 days of submitting the BIS application.
The simplified procedure is applicable for grant of BIS license of ‘All India First License’ cases and all the products listed under the simplified procedure except in the following circumstances:
Products like valves, cylinders, cement, etc., where it is necessary to obtain approval from another statutory authority
All those products where BIS license is issued on the basis of factory testing
System Certification Scheme – Applicable for systems/ process
Foreign Manufacturers Certification Scheme – Applicable for foreign manufacturers who are engaged in the sale of their products in India. The BIS grants the specially designed ISI mark for overseas applicants or foreign manufacturers under the Foreign Manufacturers Certification Scheme (FMCS) within six months. They can obtain BIS certification for products under the Compulsory Registration Scheme (CRS) and compulsory BIS certification scheme (Scheme-I).
The BIS introduced the FMCS in 2000 to enable overseas applicants or foreign manufacturers to obtain and use the standard ISI mark on their products. The foreign manufacturers have to set up a branch office in India with the required permissions and nominate an agent in India.
The foreign applicant must submit the BIS registration application form with the BIS in the prescribed format, the requisite documents and fees. The BIS will conduct a preliminary inspection of the product at the applicant’s manufacturing and testing units and collect samples for independent testing.
When the BIS is satisfied that the products meet the standard requirements, it shall grant the BIS certification. When the BIS certification is granted to the foreign manufacturer or overseas applicants, they should pay an annual minimum marking fee and annual license fee.
Hallmarking – Applicable for articles made from precious metals like gold and silver
ECO Mark Scheme – Applicable for products affecting or related to the environment. The BIS also provides certification to environmentally friendly products under the ECO mark scheme. Under this scheme, BIS categorises all environmental products that conform to the basic requirements under Indian Standards. The BIS grants an ‘ECO’ logo along with an ‘ISI Mark’ for the products.
The logo and mark indicate that the product meets certain environmental criteria and the relevant Indian Standards quality requirements. A single mark is granted to the products, which will be the combination of the ISI mark and the ECO logo.
The procedure to get the BIS license under the ECO mark scheme is similar to obtaining a BIS license for domestic manufacturers under the normal or simplified registration procedure. When a manufacturer already has a valid BIS certification mark for a product and wants to get a new product covered under the ECO mark scheme, the manufacturer has to make a specific request to the BIS. The BIS will take the required steps for grant of BIS license under the ECO mark scheme.
Obtaining the BIS registration is essentially voluntary in nature. However, BIS requires compulsory certification for products which impact the health and safety of consumers. Mandatory certification scheme is bifurcated into ISI (Indian Standards Institute) Mark Scheme and Compulsory Certification Scheme (collectively referred to as ‘Standard Mark’). ISI Mark Scheme is applicable for products such as cement, electrical appliances, baby food, etc. and Compulsory Certification is required mostly for IT/ electronic products. For procurement of the BIS certificate, the manufacturer has to ensure that the product is in compliance with the ‘Indian Standard’.
‘Indian Standard’ has been defined under the Act as the standard set and published by the BIS, with regards to any article or process which is indicative of the quality and specification of such article or process and also includes: (i) Any standard recognized by the BIS and (ii) Any standard established and published, or recognized, by the ISI and which is in force immediately before the date of establishment of BIS.
Role of BIS
The Bureau of Indian Standards Act 2016 further proposes to increase the scope of BIS by allowing theUnion government to make the standard mark mandatory for certain specified products, items, and processes.
It also enables for a variety of compliance assessment methodologies that are in line with best world w standards.
According to the Bureau of Indian Standards Act 2016 provisions, the Union Government has made step increase the ease of doing business. It will also allow any other agency with the requisite certification to conduct conformity assessments against Indian standards. The law would also allow for self-certification and market monitoring
BIS- Offences, Punishment and Enforcement Activity
The Act empowers BIS to pass orders granting, suspending or rejecting a license. Any violation of the provisions of the Act and the non-compliance with the standards set by BIS is punishable with either imprisonment for a period of one year or with a fine extending up to INR 50,000.
BIS also carries out enforcement activity to curb the use of Standard Mark or its imitation by unscrupulous traders and manufacturers not holding a valid BIS license. The objective behind these enforcement activities is to protect consumers from being misled about quality of products that are marked with the BIS Standard Mark. Enforcement raids, which include search and seizure operations are carried out against traders and manufacturers on the basis of intelligence collected regarding misuse of the Standard Mark and where required, prosecution cases are filed in the court of law.
BIS Registration Procedure
The BIS registration procedure generally involves the licensing process and surveillance process. The following steps are involved under the licensing process:
The manufacturers submit the BIS registration application
The BIS officer will visit the factory for a preliminary inspection
After the inspection, the product samples will be tested
After completion of the evaluation, the BIS officer will derive the final result
After the inspection process, the inspecting officer will conduct the surveillance process to conduct a complete survey of the factory. The following steps are involved under the surveillance process:
The inspecting authority will visit the factory to testify the test results
The inspecting officer will send the samples to the independent labs
The test report will give feedback or brief the complaint on the investigation
The performance review report will be prepared
Once the report is reviewed, the BIS license is granted
Documents Required for BIS Certification
The documents vary depending on the type of BIS registration scheme. However, the general required documents that a manufacturer needs to submit to the BIS for obtaining BIS certification are as follows:
Name and address proof of office and factory
Document showing the establishment of the manufacturing unit such as Incorporation Certificate or Registration Certificate or Memorandum of Association, etc.
MSME/SSI certificate, if applicable
Manufacturing process flow covering all processes of manufacture (from raw material to finished product stage)
Manufacturing machinery list along with the machinery details
Details of outsourcing of manufacturing operation, if applicable
A detailed list of testing facilities and testing equipment list
Copies of valid calibration certificates of testing equipment
Third-party laboratory test report as per Indian Standards, if applicable
Layout plan of the factory premises and location plan of the factory
In-house or independent test report, if applicable
In case the application is signed by the authorised signatory, the authorisation letter from CEO in the authorised signatory name
In case of a foreign manufacturer or overseas applicant, nomination details of Indian agent and nomination form
Validity of BIS Certification
The BIS certification issued by the BIS is valid for two years. The manufacturers can renew the BIS certification when there is no change in the concerned products and prescribed standards. The renewed BIS certificate will be valid for at least one year and a maximum of five years.
The renewal of the BIS certificate is subject to an annual advance minimum marking fee and license fee. However, if the renewal application of the BIS certification is filed after the expiry period of the certificate, the applicant needs to pay a late fee of Rs.5000.
Benefits of BIS Certification
The BIS registration provides the following benefits:
Ensures quality standards as BIS registration products are bound to follow a certain standard while manufacturing the goods
Gives authenticity to BIS certified products as they deliver high-quality performance and reliability
BIS certified products minimise environmental risks as BIS has prohibited the usage of certain chemicals and materials under its prescribed norms
BIS registration is granted after testing the samples of the products in BIS set-up laboratories, ensuring quality inspection and high-quality of products
Conclusion
BIS is responsible for the quality check of various products and services across 14 different sectors. The quality certification of these products safeguard people from several health and safety hazards. In the era of globalization and the growing importance of ensuring conformity with standards in global trade, BIS has huge significance and responsibility. The conformity assessment procedures have become increasingly important in the modern day and hence, BIS plays a critical role in strengthening Indian trade and exports. The Product Certification Scheme is regarded as one of the biggest around the world, with around 26500 licensees covering no less than 900 products.BIS Certification is fundamental to the use of the mark on their products.
